BOARD MEETING DATE: March 7, 2003
AGENDA NO. 6

Execute Contracts for AQIP Proposals Received During Third Quarter of 2002

SYNOPSIS: 

Rule 2202 - On-Road Motor Vehicle Mitigation Options was adopted on December 8, 1995. One of the compliance strategies under Rule 2202 allows employers to invest in the AQIP. Monies received are placed in a restricted account to fund programs that result in equivalent emission reductions that would otherwise have been achieved by the participating employers. Staff evaluated the proposals received during the Third quarter of 2002. This action is to recommend eleven projects for funding. The amount available for this quarter is $4,292,643.

COMMITTEE: 

Mobile Source, February 28, 2003, Recommended for Approval

RECOMMENDED ACTION:

1)

Authorize the Chairman to execute the following contracts for a total amount not to exceed $3,056,239 from the AQIP Special Revenue Fund. A contract with C. W. Poss, Inc., to repower 7 off-road diesel engines in six wheel type scrapers in an amount not to exceed $689,594. A contract with Nationwide Environmental Services to replace five diesel-powered street sweepers with CNG powered sweepers in an amount not to ex-ceed $300,000. A contract with Rentrac, Inc., to repower diesel engines on two wheel type scrapers in an amount not to exceed $291,416. A contract with Ryerson, Master & Associates, Inc., to re-power 12 engines on 6 diesel powered scrapers in an amount not to exceed $532,200. A contract with Scarborough Construction to repower two wheel type diesel powered scrapers in an amount not to exceed $161,194. A contract with Scarborough Construction to repower five wheel type diesel powered scrapers in an amount not to exceed $372,985. A contract with Specialty Environmental Services to repower nine gasoline powered commercial fishing boats with four stroke engines in an amount not to exceed $190,000; and a maximum of $20,700 to install global positioning sys-tems (GPS) and/or data loggers. A contract with Specialty Environmental Services to repower 21 gasoline pow-ered oil-spill response boats used in LA/San Pedro harbors, with four stroke engines in an amount not to exceed $195,000; and a maximum of $48,300 to install global positioning systems (GPS) and/or data loggers. A contract with Specialty Environmental Services to repower four gasoline powered oil-spill response boats used in Anaheim Bay, with four stroke en-gines in an amount not to exceed $57,850; and a maximum of $9,200 to install global positioning systems (GPS) and/or data loggers. A contract with Vulcan Materials to repower three off road rock diesel trucks in an amount not to exceed $188,000.

2)

Allocate $769,100 to assist in the purchase of natural gas vehicles for taxicab services.  Authorize the Executive Officer to approve (up to $15,382 per vehicle) disbursement of these funds upon the recommendation of the current contractor, Adrianus Resources, Inc.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Rule 2202 AQIP allows subject employers to participate by electing to invest in an AQMD-administered restricted fund. Investment can be either $60 annually per employee reporting to the worksite during the 6:00 a.m. to 10:00 a.m. peak window, or $125 triennially per employee. The restricted monies are to be used by the AQMD to fund proposals that achieve mobile source emission reductions that would otherwise have been achieved by implementing a rideshare program. This Board letter contains a discussion regarding the disbursal of funds from the AQIP compliance option for the third quarter of 2002.

Upon registering under this option and submitting the designated investment amount, an employer is considered to be in compliance with the Rule and there is no need for the employer to take further action to reduce mobile source emissions. The collected monies are used to fund alternative mobile source emission reduction strategies that reduce mobile source emissions at a more cost-effective rate which could potentially result in greater overall emission reductions.

The third quarter of the 2002 participation period ended on September 30, 2002 with 112 employers participating in the AQIP program. The total amount of AQIP funds received during this period was $3,810,570, which includes both annual and triennial participants. In addition, $81,754 is being carried forward from the previous quarters and $400,319 of accumulated interest (FY 2001-02) is available for contracts. Therefore the total amount available for this quarter is $4,292,643 (see Attachment 1, Table 4). Staff recommends that $3,825,339 be used to purchase emission reductions to satisfy the target for the quarter.

Proposal Evaluation

During the bidding process of the third quarter of 2002, 13 proposals were received requesting funds ranging from $33,400 to $2,900,000. The project proposals received can be grouped in two categories: Marine Vessels, and Other. Attachment 2 gives a summary of emission reduction targets and the emission reduction credit balance. Attachment 3 gives a summary of each proposal received and funds requested. Attachment 4 provides an overall summary of the proposals by type, listing the proposals received, funds requested, total proposal costs, and emission reductions expected from each proposal.

All proposals submitted were reviewed and scored based on the information in the proposal as submitted to the AQMD, and according to the selection criteria described in the RFP. The evaluation panel comprised of one Engineering and Compliance Senior Manager, one Transportation Programs Manager, one Technology Advancement Program Manager, one Planning and Rules Air Quality Specialist, and one Transportation Specialist; one female and four males; one Asian-Indian, four Caucasian. Attachment 5 discusses the selection criteria and the overall ratings for each proposal.

Selection Criteria

Attachment 5 provides a summary of the proposal rankings. After all the proposals were scored and ranked the evaluation panel proceeded to select projects from the highest scoring proposals with the specific goal of meeting the emission reduction targets for VOC, NOx and CO. Staff selected projects first to meet the 3-year VOC target followed by NOx and then CO targets, respectively. As part of the selection process, the panel based its selection on the overall cost-effectiveness of the project and the total funding requested.

The evaluation panel was able to select from the highest ranking proposals to meet the VOC and NOx targets. However, to meet CO targets, the panel selected projects based on the ability for the project to have the greatest CO air quality benefits in addition to the overall cost-effectiveness and total funding requested. While VOC and NOx are precursors to regional ozone, CO is a localized air quality problem. As such, the evaluation panel selected projects based on the ability to reduce CO in a localized manner.

The following proposals are recommended for approval (as detailed in Attachment 6):
 

1.	C. W. Poss, Inc.	$689,594
	C. W. Poss, Inc., proposes to generate emission reductions over 10 years by re-powering 7 off-road diesel engines used in 6 wheel type scrapers. The cost-effectiveness of this proposal is $0.88 per pound. This project was selected because of its score and the need to meet the 3-year NOx targets.
2.	Nationwide Environmental Services	$300,000
	Nationwide Environmental Services of Norwalk proposes to generate emission reductions by replacing 5 diesel street sweepers with new lower-emission CNG sweepers. The cost-effectiveness of this proposal is $0.85 per pound. This project was selected because of its score and the need to meet the 3-year NOx targets.
3.	Rentrac, Inc.	Option 1   $291,416
	Rentrac, Inc. proposes to generate emission reductions over 9 years by re-powering off-road diesel engines used in 2 and 5 wheel type scrapers respectively. The cost-effectiveness of this proposal varies from $0.78 to $0.87 per pound. This project was selected because of its score and the need to meet the 3-year NOx targets.
4.	Ryerson, Master & Associates, Inc. (Proposal 3)	$532,200
	Ryerson, Master & Associates, Inc. proposes to generate emission reductions over a period of 7 years by re-powering 12 diesel engines used in 6 Terex TS-24B scrapers. The cost-effectiveness of this proposal is $0.94 per pound. This project was selected because of its score and the need to meet the 3-year CO targets.
5.	Scarborough Construction	Option 1    $161,194 Option 2    $372,985
	Scarborough Construction proposes to generate emission reductions by re-powering 2 and 5 wheel type diesel scrapers. The cost-effectiveness of these proposals ranges from $0.94 to $0.99 per pound. This project was selected because of the need to meet the 3-year CO targets.
6.	Specialty Environmental Services	Option 3    $190,000 Option 6    $195,000 Option 7      $57,850
	Specialty Environmental Services proposes to generate emission reductions by re-powering outboard power boats operating on gasoline using 4-stroke engines. All the options are for a period of 5 years. Option 3 is to re-power 9 commercial fishing boats at a cost-effectiveness of $0.21 per pound; Option 6 is to re-power 21 oil-spill response boats at a cost-effectiveness of $0.23 per pound; and Option 7 is to re-power 4 gasoline powered oil spill response boats at a cost-effectiveness of $0.21 per pound. Option 3 was selected because of its overall score and the need to meet the 3-year VOC target. Options 6 and 7 were chosen because of their overall score and the need to meet the 3-year CO targets. The vessels under consideration operate primarily in the harbor area and the CO emissions may at times contribute to on-shore CO air quality.
7.	Vulcan Materials	$188,000
	Vulcan Materials of Irwindale proposes to generate emission reductions by re-powering 3 off-road diesel trucks. The cost-effectiveness of this proposal is $0.91 per pound. This project was selected because of the need to meet the 3-year CO targets.

Outreach

In accordance with the AQMD’s consulting and contracting policies, a public notice advertising the RFP and inviting bids was published in the following publications:
 

1.	Antelope Valley Press	10.	Korea Central Daily	19.	Precinct Reporter
2.	Black Voice News	11.	La Opinion	20.	Press Enterprise
3.	Chinese Daily News	12.	La Prensa Hispana	21.	Rafu Shimpo
4.	Desert Sun	13.	La Voz Publications	22.	San Bernardino Sun
5.	Eastern Group Publications	14.	Los Angeles Daily News	23.	State of California Contracts
6.	El Chicano	15.	Los Angeles Sentinel		Register
7.	El Informador	16.	Los Angeles Times	24.	The Excelsior
8.	Inland Empire Hispanic News	17.	Orange County Register	25.	The Signal
9.	Inland Valley Daily Bulletin	18.	Philippine News	26.	Wave Community Newspapers

Additionally, potential bidders were identified from the Los Angeles County MTA and Caltrans Directories of Certified Minority, Women, Disadvantaged and Disabled Veterans Business Enterprises; the Inland Area Opportunity Pages Ethnic/Women Business & Professional Directory; the AQMD’s own electronic listing of certified minority vendors; and AQMD Purchasing’s mailing list. Notice of the RFP was mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations; and placed on the Internet at AQMD’s Web site [http://www.aqmd.gov, "Business and Job Opportunities" icon] and AQMD’s 24-hour telephone message line for bidders (909) 396-2724.

A Bidders’ Conference was convened at the AQMD on June 27, 2002 to highlight the requirements of the proposals and to answer questions from the prospective bidders in attendance.

Taxicab Services

The Los Angeles Department of Transportation (LADOT) has provided the AQMD records that indicate when taxicabs must be replaced due to the maximum age requirement of the Board of Taxicab Commissioner’s Rules (Board Order No. 471 et seq.) Based upon this information, staff has identified 169 taxicabs that are expected to be replaced by the end of 2003.

To assist in the compliance to Rule 1194, staff recommends that the Board consider providing assistance to individual taxicab operators at a cost not to exceed $769,100 (up to $15,382 per vehicle) for up to 50 alternative-fueled vehicles from the CY 2002 3rd quarter Rule 2202 AQIP.

Taxicab owners, their associations, and the LADOT have been notified by AQMD that in addition to the above Board Order requirement, AQMD Rule 1194 requires them, as airport fleet operators, to procure vehicles certified as an ultra-low-emission vehicle (ULEV) or cleaner, when replacing or adding a taxicab that is authorized to pickup passengers at a commercial airport.

Adrianus Resources, Inc., under contract (#02122) with AQMD, on a task-order basis, provides assistance on implementation of the taxicab provisions of Rule 1194 – Commercial Airport Ground Access. The Contractor assists parties in the purchase of rule compliant alternative-fueled light-duty vehicles needed for taxicab operations. The Contractor serving as the AQMD’s agent prepares applications for financial assistance in the purchase of new alternative-fueled vehicles.

Global Positioning Systems (GPS)

In order to increase enforcement activities on marine vessels that are recommended for funding in this Board Letter, staff proposes to install global positioning system (GPS) units and/or data loggers on all Board approved marine vessels at a cost not to exceed $2,300 per unit for a total of $78,200 from the AQIP Special Revenue Fund. The AQMD will provide the appropriate funding to each marine vessel operator or contractor from this proposed amount to purchase GPS units and/or assorted equipment that meet the needs of the AQMD.

Resource Impact

Not applicable.

Attachments

1. AQIP Funding and Participation
2. Summary of Emission Reduction Targets and Credit Balances
3. Summary of AQIP Proposals Received
4. Summary of Proposals by Type
5. Summary of Proposal Ratings
6. Recommendation for Funding

ATTACHMENT 1

AQIP – 3rd Quarter 2002

TABLE 1

Funds Received (as of September 30, 2002)

TABLE 2

Annual Participation

TABLE 3

Triennial Participation

ATTACHMENT 1

(Continued)

TABLE 4

Total Available Funding

ATTACHMENT 2

TABLE 1

Emission Reduction Targets

(Pounds)

TABLE 2

Emission Reduction Credit Balances
(Pounds)
 

TABLE 2 (Continued)

Emission Reduction Credit Balances

(Pounds)
 

ATTACHMENT 3

Summary
Air Quality Investment Program
Proposals Received

The following proposals were received in response to the AQIP Request for Proposals (RFP) on or before November 1, 2002. The proposals are listed alphabetically, not by classification or rank.
 

1.	ArrowTek	$76,820 County: San Bernardino
	ArrowTek proposes to generate emission reductions over a period of 10 years by re-powering 4 diesel engines used in forklifts. The cost-effectiveness of this proposal is $1.54 per pound. (Not recommended due to relatively high cost-effectiveness and small amount of CO reductions.)
2.	C. W. Poss, Inc.	$689,594 County: Orange
	C. W. Poss, Inc., proposes to generate emission reductions over 10 years by re-powering 7 off-road diesel engines used in 6 wheel type scrapers. The cost-effectiveness of this proposal is $0.88 per pound. (Recommend for funding.)
3.	Earthguard Environmental Services	$1,230,000 County: Los Angeles
	Earthguard Environmental Services proposes to provide AQMD-approved Emission Reduction Credits (ERCs) from stationary sources generated by "Process Change." The quantification of these ERCs was verified by the AQMD according to the methodology contained in Regulation XIII, Rule 1306. These ERCs are offered in perpetuity and the cost-effectiveness of this proposal calculated over 15 year period is $0.91 per pound. (Not recommended due to large single project cost and does not provide NOx or CO reductions. In addition, as an option, the project proponent offered lesser amounts of ERCs at the same cost per ERC giving the same cost-effectiveness. As such, the project ranking remains unchanged and there are other projects that are more cost-effective.)
4.	Nationwide Environmental Services	$300,000 County: All
	Nationwide Environmental Services of Norwalk proposes to generate emission reductions by replacing 5 diesel street sweepers with new lower-emission CNG sweepers. The cost-effectiveness of this proposal is $0.85 per pound. (Recomend for funding.)
5.	OceanAir Environmental	Option 1     $2,600,000 Option 2     $2,700,000 Option 3     $2,900,000 County: All
	OceanAir Environmental proposes to generate emission reductions by re-powering diesel engines on 3 cranes, 20 forklifts, 2 yard hostlers and 2 locomotives over a period of 5, 7 and 10 years respectively. The proposal also includes VOC ERCs currently held by Calpine Corporation. The cost-effectiveness of this proposal varies from $0.95 to $1.71 per pound. (Not recommended since specific information was not available for the different elements of the proposal and the overall single project costs are over 50 percent of the total available AQIP funds.)
6.	Rentrac, Inc.	Option 1      $291,416 Option 2      $728,540 County: All
	Rentrac, Inc. proposes to generate emission reductions over 9 years by re-powering off-road diesel engines used in 2 and 5 wheel type scrapers respectively. The cost-effectiveness of this proposal varies from $0.78 to $0.87 per pound. (Option 1 recommended for funding. Option 2 was not recommended due to high overall single project cost.)
7.	Ryerson, Master & Associates, Inc. (Proposal 1)	$33,470 County: Riverside
	Ryerson, Master & Associates, Inc. proposes to generate emission reductions over a period of five years by re-powering 20 outboard power boats operating on gasoline with 4-stroke engines. The cost-effectiveness of this proposal is $0.14 per pound. (Not recommended for funding since the same contractor were awarded.the subject vessels are located at Lake Perris and the projected CO reductions would not benefit more urbanized areas where CO air quality may be exacerbated.)
8.	Ryerson, Master & Associates, Inc. (Proposal 2)	$368,093 County: Los Angeles
	Ryerson, Master & Associates, Inc. proposes to generate emission reductions over a period of 5 years by re-powering 5 diesel engines on Marine Vessels 'Price Tide'. The cost-effectiveness of this proposal is $1.45 per pound. (Not recommended for funding due to high cost-effectiveness and low ranking compared to other projects.)
9.	Ryerson, Master & Associates, Inc. (Proposal 3)	$532,200 County: All
	Ryerson, Master & Associates, Inc. proposes to generate emission reductions over a period of 7 years by re-powering 12 diesel engines used in 6 Terex TS-24B scrapers. The cost-effectiveness of this proposal is $0.94 per pound.  (Recommend for funding.)
10.	Scarborough Construction	Option 1      $161,194 Option 2      $372,985 County: All
	Scarborough Construction proposes to generate emission reductions by re-powering 2 and 5 wheel type diesel scrapers. The cost-effectiveness of these proposals ranges from $0.94 to $0.99 per pound. (Both options recommended for funding.)
11.	Seaboard Marine	$2,247,850 County: All
	Seaboard Marine proposes to generate emission reductions over 5 years by re-powering 13 fishing vessels with 29 low emission diesel engines. The cost-effectiveness of this proposal is 1.91 per pound. (Not recommended for funding due to high cost-effectiveness and low ranking compared to other projects.)
12.	Specialty Environmental Services (Proposal 1)	Option 1      $140,000 Option 2      $110,000 Option 3      $190,000 Option 4        $66,348 Option 5        $35,000 Option 6      $195,000 Option 7        $57,850 Option 8        $39,500 Option 9        $58,000 County: Los Angeles
	Specialty Environmental Services proposes to generate emission reductions by re-powering outboard power boats operating on gasoline using 4-stroke engines. All the options are for a period of 5 years. Option 1 is to re-power 40 rental fishing skiffs at a cost-effectiveness of $0.24 per pound; Option 2 is to re-power 4 movie support boats at a cost-effectiveness of $0.23 per pound; Option 3 is to re-power 9 commercial fishing boats at a cost-effectiveness of $0.21 per pound; Option 4 is to re-power 7 camp boats at a cost-effectiveness of $0.31 per pound; Option 5 is to re-power 3 camp boats at a cost-effectiveness of $0.42 per pound and Option 6 is to re-power 21 oil-spill response boats at a cost-effectiveness of $0.23 per pound; Option 7 is to re-power 4 gasoline powered oil spill response boats at a cost-effectiveness of $0.21 per pound; Option 8 is to re-power 5 gasoline powered rental boats at a cost-effectiveness of $0.22 per pound; Option 9 is to repower 9 gasoline powered rental boats at a cost-effectiveness of $0.34 per pound. (Options 3,6, and 7 are recommended for funding. The other options were not recommended due to the uncertainty as to the specific days the subject vessels would be operating compared to the need to meet CO emission reduction targets.)
13.	Vulcan Materials	$188,000 County: Los Angeles
	Vulcan Materials of Irwindale proposes to generate emission reductions by re-powering 3 off-road diesel trucks. The cost-effectiveness of this proposal is $0.91 per pound. (Recommended for funding.)

ATTACHMENT 4

Proposal Summary by Type
 

ATTACHMENT 4
(Continued)
 

ATTACHMENT 5

Proposal Evaluation/Contractor Selection
 

ATTACHMENT 5

(Continued)
 

ATTACHMENT 6

TABLE 1

Proposals Recommended for Funding
Anticipated Emission Reductions
(Pounds/Year)
 

TABLE 2

Proposals Recommended for Funding
Funding Request
 

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